California may get the last laugh standing firm by its tree-hugging ways.
It was largely a day of foreboding environmental forecasts at the Silicon Valley Leadership Group's Energy Summit held at Stanford on Friday. But as fuel prices continue to rise — there may at least be a promise of California offering consumers some hope …

COMMENTS

How dare they?

Don't they know that privatization ALWAYS leads to everything being better and rosier and more efficient and cheaper and better? How dare they insinuate that government (by the people, for the people) involvement might actually have benefits for the people governed? How dare they interfere with the god-given right of corporations to screw the people so long as there is a profit to be made?

I think we're just slightly ahead of the curve...

We got a preview of the current oil price turbulence when our electricity supply was deregulated around 2000. Once price caps were removed (practically the first act by the incoming Bush Administration) prices rose rapidly and we started to experience power shortages that resulted in rolling blackouts. The reason was, we were told, a combination of market forces and aging infrastructure -- our greed was overloading the system, it was all our fault (&tc &tc &tc). The trading system set up to market the power wasn't hermetic, though, and when it cracked we discovered that the real reason for power price rises was rampant speculation and market manipulation. This had the makings of a major political scandal so a deal was negotiated that essentially froze the power prices at their inflated levels.

So the reason why we're unlikely to get significant power cost rises in the near future is that we're already paying them. The deal with the power companies effectively guaranteed a fixed prices for whatever power was sold so there is an incentive for those companies to reduce demand by subsidizing power saving. Very green, but its really 'sleaze'.

The irony in all this is that the power trading system that Enron set up that allowed us to get screwed was sold off after Enron went bust and is now being used to trade oil futures. We're being treated to roughly the same show over oil prices -- its like the script's the same, its just been crudely edited to substitute oil for electricity or natural gas.

California will be wanting to...

@yeah, right

I'm having a hard time seeing your commie utopian angle in this story. These economic benefits are largely unintended consequences of measures taken for environmental reasons. It must burn you that Arnold was behind it. The biggest consequences of any government action are unintended, this one time out of 100 there seems to be some upside.

Anyway, the downfall of the deregulation fiasco was that it wasn't actually deregulation. End-user prices were capped, but utility companies' costs were not, opening the type of gigantic inefficiency that Enron-type sleazes dream of. "By the people, for the people"...screwed the people. Because "the people" tend to be even more selfish and short-sighted than those big evil corporations.

Increase??? Really?

I just moved out of California... My utility bill there was never lower than $300 per month. I had green appliances, and replaced everything when I moved into the house.

My first full month's bill for utilities was $125. I am told by my co-workers that this is the right bill... So while I may see 20%-30% increase in my bill - it still won't hit what I was paying... GO CALIFORNIA!!!

If the premise were true...

... then you'd see PG&E would be building nuclear power plants.

Oh wait, that's right. They can't because most of California is on unstable ground.

It takes about 10-15 years to build a new power plant so if you wanted to be ahead of the curve you'd have kept an active nuclear power generation program. The only *country* to do this are the French.

Yes, yet another reason to hate the French because of their smugness and forethought.

@joe

disastrous utility "deregulation" nitwittery: Gray Davis

"Global Warming Solutions Act": Arnold

"Come with me if you want to live.": Arnold

F yeah!

Unsuccessful, over-reaching government interventions tend to fall into two classes: naive first-order thinking where "we change this one thing and everything else remains unchanged" [it's never the case that "all else is equal"] and "ok, we'll correct for the higher-order terms with these specific measures", which is just a fancier version of the same failure, but usually exaggerating the severity of the worst case.

Utility deregulation was the second type, where they tried to insulate the consumer from risk by capping his costs, deregulating only the prices paid by the utility company. No pricing pressure, demand unchecked, Enron jerks laughing all the way to the bank because they can charge the utilities as much as they want.

hypocrites

California imports significant amount of energy, probably >20%, from other states. Some of it comes from coal burning plants, some from Hoover Dam and other hydro. Californians will keep getting screwed up on energy until they build more power plants. Or until enough people flea the state to cause energy consumption to drop.

re: @yeah, right

So what if they are unintended consequences? Are they consequences you'd like to see? Lower increase in bills?

PS to "Increase??? Really?" Please remember that the $300 bill was the result of private enterprise being allowed to run utilities. Rather tells the lie to private industry being more efficient and cheaper, eh?

PG&E rebates on Sun Technology

Not sure if you followed the story but PG&E were so impressed with Niagara they offer rebates of up to $1000 per server, I understand the ONLY one on the market to receive this....'by their fruits shall ye know them'

@ Martin Usher

How can you manage to drop in a Bush reference and totally miss the boat on Gray Davis? Remember most vividly and denounce the Republican who changed the system, but forget the Democrat who actually committed the crime?

Oh we're ahead of the curve allright

We didn't "dodge" any bullet for price increases, CA Demos were already screwing over the people for a lot longer so we just got these "price increases" earlier.

"Green" my @ss. The only "green" is the money government and their industry cronies can bring in. CA is just ahead in the corruption, but has Big Media covering up for them and making excuses or telling only half truths.

Let's put the blame wjere it belongs.

The California Electricity deregulation bill was actually passed during the previous Republican administration. By the time it came into effect, and the "smartest guys in the room" figured out how to get rich off it, Gray Davis was governor, and got hit with the resulting flak.

By the way, some Republicans think Arnold is a closet Democrat. Just remember the family his wife comes from. He certainly ranks higher on my list than just about any other Republican in years.

@The Prevaricator

Naw !! Highly unlikely !! With a large minority of its population of Asian origin and with the rise of China and Vietnam as economic dynamos, not to mention the Japanese out-innovating everyone else, California will opt to join the Greater East-Asia Co-prosperity Sphere V2.0 !! V1.0 got incinerated in nuclear fire at the end of 1945 !! V2.0 relies on more pacific(??) means (pun intended) !!